Something is happening in China, the land of Alibaba, Tencent and Baidu; Costco, an American warehouse club chain, is in town. The Chinese people could not overcome the joy of going to shop for really great bargains in Costco despite the digital shops in their smartphones! The demand was so huge that the company was forced to “shut down in the afternoon because of overcrowding”. Yes, customers wanted something new: great value.
American shopping giant Costco got an unexpectedly frenzied welcome from zealous Chinese shoppers. Costco opened its first warehouse club in China today (Aug. 27), in a suburb of Shanghai. Just a few hours into business, it had to shut down in the afternoon because of overcrowding, according to screenshots of messages (some links below in Chinese) sent to customers around 2pm circulating on China’s social media Weibo. Local media reported that local residents swarmed to the store—with cars queuing up to enter half a kilometer (0.3 miles) away, footage from news portal Sina showed.
Costco charges membership fees and uses the money to subsidize prices of items which are typically bought in bulk. Costco stores look simple because it has never been opened to the fashionista way [expensive stores] as it wants to focus on what customers really care about: great value for money.
Back to Nigeria, Nigerians have shown that they like Shoprite predictable quality despite the marginal higher cost compared to open markets. Costco is essentially a Shoprite where only people with membership cards can shop, typically buying in bulk.
Building companies like Shoprite and Costco may not sound fanciful but they are just the type of retail businesses that would be here for long in Africa. Yes, no one will see them as being fashionable but they will be solidly successful. Ecommerce will make the news but physical stores with inventive business models will keep the profits for a really long time in Nigeria.
Of course, very few investors would like to see such business plans when the mantra is that “software will eat the world” even though there is nothing electronic in the Nigerian ecommerce without a national postal service.
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I think the underlying factor for a successful business isnt if its offline or online, but if it delivers discernable value, and is also able to capture some of that value for its shareholders.
Good point – I do not think any ecommerce in Nigeria will capture value for that shareholder in near future.
The real pain points in commerce space here centre on quality of products on sale and affordability. All the gyrations and hysteria have these two elements about them.
It is when these two are resolved successfully, then we can talk about customer experience and convenience; they will always take backseat once product quality and affordability are questionable.
There are lots of disruptions that can still take place in the commerce space, with high dose of technology playing central role, but they require substantial investments, way beyond what ‘App investors’ are willing to do.
Humans will remain humans, and there will always be a better life outside smartphones; fleeting moments will come and go, but we barely change.
Nothing beats going out there and meeting people, and it’s not going to change anytime soon.
Does it not partly depend on the physial & technology infrastructure which Nigeria ( and other African countries) build, say within the next 5 to 15 years. Wouldn’t it make a significant difference for example, if internet penetration becomes much higher, better roads and public transportation lead to improved communication, and quick parcel delivery options ( not just Amazon drones), comparable to say thoe present in a country such as South Korea?